Syria is rolling out the red carpet today for an unusually important visitor, King Abdullah of Saudi Arabia, whose arrival in Damascus represents a long-awaited public rapprochement between the Arab world’s two bitterest rivals.

Abdullah – referred to with customary deference as the Custodian of the Two Holy Mosques – is holding two days of talks with President Bashar al-Assad on the staples of Middle East politics. Lebanon, Iran, Iraq, the Palestinians and Israel are all on the agenda.

In regional terms, this is a big deal and both sides are making a fuss, lavishing praise on each other and counting the blessings for Arab unity. Saudi royals don’t travel light, and the king’s heavyweight entourage – including a sizeable media “delegation” as well as the usual cohorts of security men, camp followers and servants – is occupying entire floors of Damascus’s finest hotels.

But familiar images of powerful Arab leaders embracing mask an event of real significance: reconciliation between an ultra-conservative monarchy with an intimate relationship with the US, and a repressive republican regime that is Iran’s only Arab ally.

The kiss-and-make-up between what Arab commentators call “the two Ss” marks the end of a bitter feud that began over the US invasion of Iraq and escalated four years ago when someone – widely believed to be working for Syria, despite denials from Damascus – murdered Rafiq al-Hariri, the former Lebanese prime minister. Hariri, a billionaire Sunni businessman who did much to rebuild war-ravaged Beirut, was close to the Saudis and a major investor in the kingdom. A UN tribunal in the Netherlands is charged with bringing his killers to justice, but Syria seems confident it will not be held accountable.

After Hariri’s assassination the Saudis and Syrians lined up behind different sides in Lebanon, so often the stage on which wider Arab tensions are played out. The Saudis backed Hariri’s son Sa’ad; the Syrians supported the Hizbullah opposition, with its close links to Iran. It all turned very ugly in 2006, when Assad taunted the (US-backed) Saudis and Egyptians that they were “half men” and powerless in the face of Israel’s onslaught on Lebanon.

A thaw began earlier this year at one of the Arab summits convened during the Gaza war, and Assad flew to Jeddah last month. However, it has not yet been possible to form a new Lebanese government following Sa’ad Hariri’s resignation as prime minister-designate over demands made by Hezbollah. Lebanese pundits hope the Syrian-Saudi rapprochement will help resolve that crisis.

Broader international and regional factors are also in play. Under George Bush, the US had good relations with the Saudis, at least after the initial shock of 9/11, and correspondingly bad ones with Syria, which was furious at the overthrow of Saddam Hussein. Barack Obama, by contrast, is mending fences with Assad. The Saudis, carefully reading the diplomatic coffee grounds, think it a propitious moment to do the same.

Abdullah also wants to close Arab ranks in the face of Obama’s failure, so far at least, to make any headway with the Israeli-Palestinian peace process. Damascus and Riyadh are on opposite sides on the Palestine issue – with Syria backing the Islamists of Hamas, and the Saudis supporting Mahmoud Abbas’s Fatah. Their reconciliation could prompt the divided Palestinians to follow suit.

The Saudis, with US support, also hope their improved relations with Syria will help draw Assad away from his odd-man-out alliance with Iran.

Assad’s response before has always been that Syria has no need to choose between friends. It is not clear that his answer will be any different this time.